Former U.S. Federal Reserve chairman Alan Greenspan’s memorable phrase “irrational exuberance” aptly captured the frothy dot-com days of the 1990s.

It’s also been used to describe the growing enthusiasm surrounding Canada’s cannabis sector as the country prepares for the legalization of marijuana this summer.

Certainly, there was plenty of buzz at a cannabis conference in Calgary that drew a sold-out crowd of more than 300 people and some of the biggest industry names to a Friday luncheon.

Looking out at the sector’s future, the executives painted a bright picture of expansion and opportunities. But it’s also clear a fierce battle is shaping up for market share and dominance in a fledgling industry.

Canopy Growth Corp. CEO Bruce Linton, who has seen his company’s market capitalization swell to $6.5 billion, noted that just three years ago he had to explain why his company was worth $80 million.

Some people have compared the fervour around cannabis stocks to the dot-com days and Linton understands it, in part. But he also believes that ignores the reality some strong technology companies were launched and took flight following that era.

“It is a bit like the dot-com, but it’s not like the dot-com was a total waste of time,” he told the crowd.

In an interview, Linton pointed out the 1990s tech bubble attracted a lot of people and money into the sector, setting the stage for the industry’s development to accelerate.

“When (Google) went public at $100, I thought it was a hell of a good deal,” he added.

“I didn’t buy any of the stock with the guy who had some kind of truck that would deliver bananas to your door and his market cap was a couple-billion dollars.

“So you have to be discerning in your analysis of who is talking and who’s working … and who is just making a run for the money.”

One sign of the sector’s acceptance has been the ability of public companies to raise significant investor interest. There’s also been a flurry of deal-making in the cannabis industry recently.

Major U.S. liquor firm Constellation Brands Inc. agreed in October to invest $245 million for a stake in Canopy Growth. Alberta-based Aurora Cannabis Inc. announced in January it would buy CanniMed Therapeutics Inc. of Saskatoon for more than $1 billion.

The value of the Canadian Marijuana Index, which tracks 24 cannabis stocks, more than doubled between early September and the end of 2017. Since then, it’s been on a wild roller-coaster ride, down about four per cent this year.

Canopy, Canada’s largest marijuana firm, has seen its share price jump 13.6 per cent this week, while Aurora stock is up 10.4 per cent.

Ted Hellard, who co-founded digital advertising agency Critical Mass two decades ago and is now executive chairman of privately held cannabis producer Sundial Growers Inc., said there are many similarities with today’s boom and the dot-com stock run of the late ’90s.

“When the internet came out, nobody really knew what it was going to be able to do. So it was a lot of promise, and people didn’t know what side of the promise they needed to bet. They just thought they needed to be in it, somewhere, somehow,” said Hellard, a former Calgary Stampeders co-owner.

“That’s the biggest similarity. We don’t really know where it’s going to go, we don’t really know who the big winners are going to be. It’s too early in the race yet to know, but everybody wants to be in it, somehow.”

But Jay Wilgar, CEO of Newstrike Resources Ltd., believes it’s unfair to compare the liftoff in cannabis stocks to the tech sector turmoil that unfolded almost two decades ago.

Demand for this product is already well-established and there are barriers to entry for new players, such as the need to obtain a federal licence to produce.

According to Statistics Canada, about 4.9 million Canadians consumed marijuana last year, spending an estimated $5.7 billion.

A study last fall by Mackie Research Capital Corp. pegged demand for recreational cannabis this year to be worth an estimated $5.2 billion to $7.9 billion.

Analyst Greg McLeish of Mackie Research noted many of the larger cannabis companies have begun to bolster their bench strength, adding senior executives with significant corporate experience.

But some players are overvalued and likely to be left behind once the dust settles.

“The outlook for the cannabis sector is still positive. There are a lot of interesting opportunities out there, but you do have to pick your places,” he said this week.

As Canada moves toward the end of marijuana prohibition, nine U.S. states have already legalized, although weed is still prohibited under federal American laws.

That sets the stage for Canadian companies to try to position themselves to become global leaders, if more countries open the door to medical and recreational marijuana use.

“There is a window of opportunity for us to expand on a global basis without competition from our neighbours south of the border,” Battley, whose company has a market capitalization of $5.7 billion, later told reporters.

“We want to move quickly to capture that advantage.”

With 91 companies holding federal cannabis production licences today, it’s clear a number of businesses are jockeying to carve out space in an increasingly competitive industry.

The market will be prime for a shakeout, whether it’s irrational exuberance or well-grounded enthusiasm driving the sector forward.

“The key thing here is we have an industry which has legitimate growth prospects in Canada and internationally,” said McLeish.

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